The economic impact of climate risks in China: evidence from 47-sector panel data, 2000–2014
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Climate risks have significant economic impacts on the various sectors of an economy through direct and indirect channels. When aggregated, their impact can be underestimated or overestimated. This paper examines the impact of five types of climate risks on 47 sectors in China from 2000 to 2014 through the application of a threshold model. We find that: (1) the impact of the integrated climate risks index on sector output is linear. While rainstorms show a U-shaped relationship with output, the other four types of risks—droughts, typhoons, high temperatures and low temperatures freezing—have an inverted U-shaped relationship. (2) Climate risks indirectly influence sector output through capital stock in a significantly positive way. (3) The proportion of intermediate inputs leads to significant differences in the impact of climate risks on sectors. The results suggest that climate policies need to be sector- and risk-specific, as well as dynamic.
KeywordsClimate risks Sector output Capital stock Intermediate inputs
This work was supported by the Major Projects of the National Social Science Foundation of Research on “Supply-side Structural Reform and New Developing Impetus” (Grant No. 16ZDA006), National Social Science Foundation of Research on “Study of Measurement of Statistical Misreporting and Correction Mechanism: Based on Incentive of Local Government” (Grant No. 17BJL070), Humanity and Social Science Youth Foundation of the Ministry of Education in China on “GDP Misreporting and Formation Mechanism under Official Evaluation: Study Based on Satellite Light Data” (Grant No. 16YJC790136) and Humanity and Social Science Youth Foundation of the Ministry of Education in China on“The Effects and Mechanism of Producer Services Cluster on Carbon Emissions EfficiencyofManufacturingin China” (Grant No. 18YJC790103).
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